Market Overview

S&P 500 Closes Above 2,000; Dow Hits New All-Time High As Markets Continue To Rally

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U.S. stocks rose, lifting the Dow to new historical all-time highs of 17,153.80 following a better than expected rise in orders of durable goods.

Consumer confidence improved in August, helping market sentiments while investors and traders placed less emphasis on a report that home prices are rising at a slower rate than a year ago.

Year over year, the S&P Case-Shiller Home Price Index rose only 8.1 percent, below the expected 8.4 percent rise and a prior reading of 9.3 percent.

Trading volume remains light heading in to the long weekend. U.S. markets will close on Monday for Labor Day.

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  • The Dow gained 0.17 percent, closing at 17,106.70.
  • The S&P 500 gained 0.11 percent, closing at 2,000.02.
  • The Nasdaq gained 0.29 percent, closing at 4,570.64.
  • Gold gained 0.32 percent, trading at $1,283.00 an ounce.
  • Oil gained 0.58 percent, trading at $93.89 a barrel.
  • Silver lost 0.07 percent, trading at $19.34 an ounce.

News Of Note

ICSC Retail Store Sales rose 4.2 percent year over year after rising 3.8 percent last week.

July Durable Goods rose 22.6 percent (versus expectations of 5.1 percent gain) to 300.1 billion

June FHFA Housing Price Index rose 0.4 percent month over month (versus expectations of 0.3 percent gain) after rising 0.2 percent in May.

S&P Case-Shiller Home Price Index rose 0.1 percent month over month (in-line with expectations) after previously rising 1.2 percent.

Redbook Chain Store Sales rose four percent year over year after rising 3.7 percent last week.

August Richmond Fed Manufacturing Survey rose to +12 (versus expectations of +8) from +7 in July.

August Consumer Confidence rose to 92.4 (versus expectations of 89.5) from 90.3 in July.

Analyst Upgrades And Downgrades Of Note

Analysts at Benchmark maintained a Buy rating on Big Lots (NYSE: BIG) with a price target raised to $53 from a previous $49. Shares hit new 52-week highs of $48.42 before closing the day at $47.97, up 1.25 percent.

Analysts at Citigroup maintained a Buy rating on Carter's (NYSE: CRI) with a price target raised to $95 from a previous $93. Shares hit new 52-week highs of $84.19 before closing the day at $83.52, up 0.42 percent.

Analysts at Bank of America reiterated an Underperform rating on First Solar (NASDAQ: FSLR) with a price target raised to $55 from a previous $55. Shares lost 0.20 percent, closing at $71.02.

Analysts at Citigroup maintained a Buy rating on Foot Locker (NYSE: FL) with a price target raised to $62 from a previous $56. Shares hit new 52-week highs of $55.63 before closing the day at $55.37, up 1.45 percent.

Analysts at MKM Partners initiated coverage of Goldman Sachs (NYSE: GS) with a Buy rating and $213 price target. Shares gained 0.02 percent, closing at $177.90.

Analysts at JMP Securities downgraded InterMune (NASDAQ: ITMN) to Market Perform from Market Outperform. Shares gained 0.18 percent, closing at $72.98.

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Analysts at First Analysis initiated coverage of LinkedIn (NYSE: LNKD) with an Overweight rating and $280 price target. Shares gained 1.29 percent, closing at $225.36.

Analysts at Morgan Stanley upgraded Melco Crown Entertainment (NASDAQ: MPEL) to Overweight from Equal-Weight. Shares lost 0.03 percent, closing at $28.69.

Analysts at Credit Suisse downgraded Qihoo 360 Technologies (NASDAQ: QIHU) to Neutral from Outperform with a price target lowered to $115 from a previous $156. Shares lost 1.83 percent, closing at $92.15.

Analysts at Morgan Stanley initiated coverage of Transocean Partners (NYSE: RIGP) with an Overweight rating and $31 price target. Analysts at Barclays also initiated coverage of Transocean Partners with an Equal-Weight rating and $26 price target. Shares hit new 52-week highs of $26.40 before closing the day at $25.86, up 3.27 percent.

Analysts at Stephens & Co initiated coverage of United Natural Foods (NASDAQ: UNFI) with an Overweight rating and $76 price target. Shares gained 2.34 percent, closing at $65.51.

Analysts at Macquarie initiated coverage of Wolverine World Wide (NYSE: WWW) with a Neutral rating and $29 price target. Shares lost 0.19 percent, closing at $26.84.

Equities-Specific News Of Note

According to Bloomberg, Apple (NASDAQ: AAPL) and its suppliers are manufacturing a 12.9-inch iPad for early 2015. Shares lost 0.64 percent, closing at $100.89.

Medtronic (NYSE: MDT) acquired Dutch-based Sapiens Steering Brain Stimulation for $200 million in cash. The company develops a deep brain stimulation system that includes 40 individual stimulation points. Shares lost 0.17 percent, closing at $63.52.

Valmont Industries (NYSE: VMI) acquired a majority stake in AgSense, an agricultural technology company for an undisclosed amount. Shares gained 0.86 percent, closing at $142.01.

Consol Energy (NYSE: CNX) and its joint venture partner Noble Energy (NYSE: NBL) filed with the SEC for an IPO for its MLP midstream assets in the Marcellus Shale. The new company will be known as Cone Midstream Partners and could debut trading on the NYSE as soon as the fourth quarter under the ticker CNNX. Shares of Consol Energy gained 0.89 percent, closing at $39.74 while shares of Noble Energy gained 0.52 percent, closing at $71.40.

Pfizer (NYSE: PFE) and Merck (NYSE: MRK) will collaborate together in a Phase 1b study evaluation the safety and tolerability of a combination therapy in patients with non-small cell lung cancer. Shares of Pfizer gained 1.04 percent, closing at $29.21 while shares of Merck hit new 52-week highs of $60.40 before closing the day at $60.20, up 0.79 percent.

American Airlines (NYSE: AAL) and U.S. Airways will pull its fares from Orbitz's (NYSE: OWW) platform. Shares of American Airlines lost 0.84 percent, closing at $39.09 while shares of Orbitz lost 4.63 percent, closing at $8.04.

Statoil (NYSE: STO) said that its activity level is at its highest level ever with 61 projects in execution and more than 40 projects in the planning stage. Statoil also noted that it expects delays in Russian energy projects. The company also said it will maintain its current oil and gas production in the coming years. Shares gained 0.21 percent, closing at $28.44.

Allergan (NYSE: AGN) has scheduled a special shareholder meeting requested by Valeant Pharmaceuticals (NYSE: VRX) and Pershing Square on December 18. Shares of Allergan gained 0.34 percent, closing at $163.97 while shares of Valeant Pharmaceuticals gained 1.40 percent, closing at $117.10.

The Chinese government is considering a $16.25 billion investment to fund electric-car chargers. Shares of Kandi Technologies (NASDAQ: KNDI), a Chinese-based electric vehicle manufacturer, rose  4.49 percent, closing at $19.09.

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According to Reuters, Ann (NYSE: ANN) has hired bankers to advise the company on strategic alternatives, including a sale of itself. Shares gained 4.83 percent, closing at $41.87.

Bob Evans Farms (NASDAQ: BOBE) said that according to preliminary results four of Sandell Asset Management's nominees were elected to the company's board of directors. Shares lost 2.73 percent, closing at $47.76.

Newmont Mining (NYSE: NEM) said that it withdrew its international arbitration filing against the government of Indonesia over an export tax imposed in January. Shares gained 2.0 percent, closing at $26.50.

Winners Of Note

Burger King Worldwide (NYSE: BKW) and Tim Hortons (NYSE: THI) officially announced plans to merge. Under the agreement, Tim Hortons shareholders will receive C$65.50 per share in cash in addition to 0.8025 shares in the new company. The two companies will continue operating as separate brands.

Warren Buffet's Berkshire Hathaway will provide 25 percent of the necessary financing. 3G Capital, the majority shareholder of Burger King will retain majority ownership of the new firm with a nearly 51 percent stake.

Shares of Burger King lost 4.32 percent, closing at $31.00 while shares of Tim Hortons hit new 52-week highs of $82.16 before closing the day at $81.05, up 8.47 percent.

Decliners Of Note

Tuesday morning, Sanderson Farms (NASDQ: SAFM) reported its third quarter results.

The company announced an EPS of $3.30, missing the consensus estimate of $3.82. Revenue of $768.40 million missed the consensus estimate of $789.20 million. Net income for the quarter rose to $76.08 million from $67.92 million in the same quarter a year ago as the company benefited from favorable market conditions. However, the company noted that poultry prices were higher than a year ago, as the Georgia Dock whole bird price remained at historically higher levels in the quarter. Boneless breast meat prices peaked below last year's high but still remained above $2.00 per pound through June into July.

The company also noted that its financial results were affected by accruals booked for the company's bonus award program as management deems it probable it will achieve a portion of the targets under its bonus award program. In addition, the quarter was impacted by lower than anticipated volume processed at its plants in which 770.4 million pounds of fresh poultry were produced, 44.7 million pounds fewer than projected in May.

Shares lost 5.60 percent, closing at $89.79.

Best Buy (NYSE: BBY) reported its second quarter results.

The company announced an EPS of $0.44, beating the consensus estimate of $0.31. Revenue of $8.90 billion missed the consensus estimate of $8.99 billion. Net earnings for the quarter fell to $146 million from $266 million in the same quarter a year ago as comparable-store sales fell two percent in the U.S. and fell 6.7 percent internationally. The company noted that continued weakness in the consumer electronics category contributed to declining sales. The company saw its domestic gross profit rate fall 390 basis points to 23.4 percent while overall its gross profit rate fell 340 basis points to 23.1 percent. Domestic SG&A expense ratio fell 180 basis points to 20.1 percent, overall the company's SG&A expense ratio fell 160 basis points to 20.4 percent. Best Buy did note that its comparable online sales rose 22 percent as online traffic rose at the expense of brick and mortar traffic that declined. Best Buy warned investors that it expects the consumer electronics category to remain weak over the following quarter as consumers appear to be waiting for new smartphone launches. Finally, the company stated that it saw an additional $40 million in annualized Renew Blue cost reductions, bringing the cumulative total to $900 million.

Shares lost 6.85 percent, closing at $29.80.

Trina Solar (NYSE: TSL) reported its second quarter results.

The company announced an EPS of $0.14, in-line with the consensus estimate. Revenue of $519.40 million missed the consensus estimate of $562.35 million. Net income for the quarter rose to $10.3 million from a net loss of $33.7 million in the same quarter a year ago as module shipments rose 46 percent from a year ago and 69 percent from last quarter to 943.3 MW. Of the company's total module shipments, 148.7 MW were shipped to the company's own downstream power plants in China and the U.K. Total modules shipped was in-line with prior guidance of 950 MW to 1,010 MW. The company said that it expects to ship 1,060 MW to 1,120 MW of PV modules in the third quarter, of which 130 MW to 150 MW would be shipped to its own projects. The company also reiterated full-year fiscal 2014 guidance of shipping 3.6 GW to 3.8 GW total PV module shipments.

Shares lost 8.0 percent, closing at $12.30.

Doral Financial (NYSE: DRL) has been unable to reach a settlement with the Treasury Department of Puerto Rico. As negotiations have ceased, the case is scheduled for a trial on September 16. Shares lost 19.14 percent, closing at $6.76.

Earnings Of Note

Regis (NYSE: RGS) reported its fourth quarter results.

The company announced an EPS of -$0.10, missing the consensus estimate of $0.04. Revenue of $483.0 million beat the consensus estimate of $477.50 million. Net income for the quarter slipped to a net loss of $17.02 million from a net income of $675 million in the same quarter a year ago as same-store sales fell 1.8 percent in the quarter while same-store service and product sales fell 0.2 percent and 8.4 percent, respectively. Regis noted that it saw higher labor costs largely associated with stylist hours, increased marketing, and lease termination costs which were only partly offset by improved cost of product and cost savings. The company noted that there is still a clear need for transformational change to lay the foundation for a turnaround. The company stated that its key priorities moving forward include “the theme of people, process and metrics enabled by real time information to make good business decisions and drive execution.”

Shares lost 4.47 percent, closing at $14.09.

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Tech Data (NASDAQ: TECD) reported its second quarter results.

The company announced an EPS of $1.12, beating the consensus estimate of $0.77. Revenue of $6.80 billion beat the consensus estimate of $6.70 billion. Net income for the quarter rose to $39.33 million from $14.70 million in the same quarter a year ago as consolidated net sales rose 6 percent from a year ago. The company saw its net sales in the Americas rise 4 percent from a year ago to $2.7 billion while European sales rose 11 percent from a year ago to $4.1 billion. The company noted that a vibrant PC market enabled the company to meet the needs of its customers. The company issued guidance and expects year-over-year low to mid-single-digit sales growth in the Americas and mid to high single-digit sales growth in Europe.

Shares hit new 52-week highs of $71.31 before closing the day at $66.37.

Quote Of The Day

"We are very proud of the great history of our organization and the progress we have achieved in creating value and delivering the ultimate experience for our guests. As an independent brand within the new company, this transaction will enable us to move more quickly and efficiently to bring Tim Hortons iconic Canadian brand to a new global customer base. At the same time, our customers, employees, franchisees and fellow Canadians can all rest assured that Tim Hortons will still be Tim Hortons following this transaction, including our core values, employee and franchisee relationships, community support and fresh coffee." - Marc Caira, president and CEO of Tim Hortons, in a press release following its merger with Burger King Worldwide

Posted-In: American Airlines ann Apple best buy big lots Bob Evans FarmsNews After-Hours Center Best of Benzinga

 

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